Restructuring the Electricity Sector in Turkey

Abstract

Public utilities have been at the very centre of economic and social development of countries. Until the last decades, they were almost exclusively undertaken by public authorities. From the 1980s, they have been subject to liberalisation in many countries. Liberalisation of electricity means that the segments which are vertically integrated are unbundled and opened to private sector through privatisations. However, since the transmission and distribution segments are networks that exhibit severe natural monopoly characteristics, they should be either owned and operated by public bodies or regulated by independent regulatory authorities to protect consumer interest. In Turkey, the liberalisation process for the public utilities has begun in 1990s, but posed many problems at administrative and juridical stages. Lately, the legislative framework which is designed to be compatible with global standards has been completed. But at economic stage, we can easily observe the power of big companies and holdings outweigh the power of public authorities and counteract the public interest.